Chaayos begins brewing ‘Meri wali chai’ in Bengaluru

Chaayos has 1.5 million registered guests across 65 cafes in 6 cities

Nitin Saluja was working with a consulting firm in New York when on a Sunday, he, along with his wife, had the urge to have a good cup of tea after finishing a spicy burrito breakfast. That was when it hit him that back in India, a ‘tea-drinking country’, the only options he would have had to satiate this urge, were to go to a ‘tapri’ or to go back home and get working in the kitchen. That moment, and the added realisation that India, in 2012, had about 2,000 coffee cafes and not a single tea cafe, triggered the idea of Chaayos.

He moved back to India the same year to give this idea a form and with his former colleague and co-founder Raghav Verma, started the company that today serves 80,000 varieties of tea.

Chaayos, which has 1.5 million registered guests across 65 cafes in 6 cities — Delhi, Mumbai, Noida, Gurgaon, Chandigarh and Faridabad — has now entered the Southern market, opening three outlets at Indiranagar, Phoenix Market City, and Park Square Mall, in Bengaluru.

The start-up is backed by Tiger Global Management, SAIF Partners and Integrated Capital. The company last year did its Series B led by private equity firm, SAIF partners, raising $12 million. It has raised a total capital of $20 million.

The three premises

Before setting up Chaayos’ first outlet, Saluja talked to potential customers like friends and family and observed three things that set the ball rolling on how they would go about the business.

“They wish to have tea outside of the home, at a trendy place, resonated with everybody. There was clearly, a supply gap and not a demand gap,” says Saluja.

Saluja adds, “Secondly when we started asking people the kind of chai they’d prefer, we realised that there’s no definition of a perfect cup of chai. It’s stupid to think of a cookie-cutter model. We made this idea our USP.”

He further observed that in India, one needs something to nibble when drinking tea. This led to the inception of their menu, which is curated by the founders and includes snacks like Bun maska, rusk, cookies, baarish wale pakode among others.

The extra bucks

With Indians being so accustomed to drinking tea at home for free or a tapri for a few bucks, the question if the customer would be willing to pay a few extra bucks for the beverage, was there in the founders’ mind.

“When all was set, we just wanted to test this one thing out. Opening up our first outlet in Cyber City, Gurgaon was a profound experiment as people get free tea in offices. Would they come leaving that tea to pay 40 bucks for our chai here? We had a doubt, but they did come, in fact, sometimes 4 times a day,” says Saluja.

“Our average customer visits Chaayos four times a month, which is astronomically high compared to the repeat rates you see in the industry. It’s because of the kind of customised products that we are serving, it’s a very personal connect,” adds Verma.

‘Feels like home’

The company earlier defined its target group from 24 years to 34 years, which they have now refined to 20 years and beyond.

“While the number has increased, we don’t see college students here in abundance. Over a period of time, Chaayos has become like an ‘adda’. People don’t come here on their first date, but when they start to hang around, they come here because it feels like home. This product works for an entire age spectrum. Nobody gets bored of their chai,” Saluja says.

The only customised tea player

Saluja mentions that Chaayos takes care of the precise instructions that every customer gives in the process of making their tea.

Referring to the competition, he says, “There’s no pre-mix, pre-made chai like other players have. Every cup is fresh and customised. We are the only ones doing that.”

“We blend our own teas, we don’t work with the gardens, we work with resellers who pick components for us and then we blend. It’s a custom blend.”

Teching up

The company has come up with IoT powered Chai bots called Chai Monk. A Chai Monk is used to brew a cup of Chai personalised to the guest’s preference. Chai Monks, says Saluja help ensure consistency across all cafes, which they had tried to do manually over the past years.

Another technology that Chaayos is boasting of is facial recognition for logging in, which would be helpful for repeating the chai that the customers had before, or usually, like to have and concurrently for making payments

The Bengaluru strategy

In the city, says Saluja, the company will play on its strengths. “All we have to do here is educate the customer about our customisations. In Delhi, Mumbai, it’s a no-brainer that one goes to Chaayos to get their cup of tea, exactly the way they like. Bengaluru till now has only been exposed to a chai that’s pre-made and will be poured out to them in a cup. We are here to change that.”

The Year-on-Year (y-o-y) growth for Chaayos has been 60-70% and the founders believe they’ll be inching towards 100% growth in the next 2-3 years.

Talking about the star products in the menu, Verma says, “Meri wali chai is the top seller. We have our Gurr wali chai that we bring back every winter. Modinagar wali shikanji is a top-selling cold beverage. The menu is designed, keeping tea at the core.”

A deeply customer-centric approach, ‘no questions asked’ replacement policy, loyalty programme in which you get a free chai after every 6 visits, and hygiene, Saluja believes, have been the major reasons for the success of the start-up in Delhi and Mumbai.

“Most of the team members who’ll serve in Bengaluru will be coming from Delhi and Mumbai. We want to maintain the continuity of what we are identified for in Delhi or Mumbai here,” adds Verma.

Chaayos plans to open up 15 stores in Bengaluru and would be looking to reach the 100 store mark as a company, by the end of the financial year.